AT&T's cheap access to Internet is unlikely to convert the millions

The Outlook

March 03, 1996|By Michael Dresser

Last week, AT&T Corp. sent shock waves through the stock market by announcing that it would offer Internet access services to all its customers, including a plan under which they can receive an unlimited connection to the Internet at $19.95 a month. Is this the big breakthrough that will transform the Internet from a techno-buff's paradise into a mass medium?

Does AT&T's move spell doom for the cottage industry of smaller Internet providers that has sprung up in recent years? Can AT&T deliver on its promises?

Mary J. Cronin

Author of "Global Advantage on the Internet" and management professor at Boston College

It's definitely going to have an impact on the number of home connections to the Internet. It's really a breakthrough in branding. That's been one of the most confusing things to the average consumer.

To me this means it's going to get less expensive for consumers. It will be a big motivator for more and more companies in different industries to use the Internet for commerce.

It's going to strain the smaller Internet access providers to the breaking point. They really need to look at what they're providing to consumers beyond plain vanilla Internet access.

AT&T doesn't necessarily understand what it's going to take to offer Internet access. It doesn't have the Internet backbone developed that MCI and Sprint do. AT&T is going to find that it might not have the infrastructure in place to meet the demand.

MCI announced national dial-up access and didn't follow up on it. What they found was it's a much more complicated business than they expected. The smaller providers have been able to do a better job providing consumers dial-up access.

I think that AT&T was trying to capture the popular imagination as a serious provider in the Internet access business and they are probably going about it the wrong way. There will probably be frustration on the part of the consumer. They've said there will be no busy signals and nobody's been able to pull that off at that price.

This couldn't be a wise business move because they won't make any money. My reading is that this is just a PR move. But if this is just a loss leader to get long-distance business, if they can't keep their promises, they're obviously going to have dissatisfied customers.

You might say AT&T can do anything, but they failed in the computer business.

Stephen Effros

President, Cable Telecommunications Association

Once they offer this, they should offer it over cable so it can be higher speed. Imagine how exciting it would be if they linked up with a local cable provider that can deliver data at close to 1,000 times faster than you can over telephone.

This is a natural marriage. In this case we're the only game in town because we've got something nobody else has -- a broadband pipe into the home.

The problem now is that Internet traffic slows down as soon as you go outside the community because it's the long-distance lines that are the slow lines. The fact that AT&T is offering something like this might help deal with the long-distance speed issues.

Ron Bosco

President, Federal Engineering, Fairfax, Va.

If you're predisposed to access the Internet, you tend to be more technology-oriented anyway, so the AT&T brand isn't going to sway you one way or another. The claim that AT&T is going to have people connecting to the Internet is probably being made by people who are not connected to the Internet.

There are alternatives. People are sophisticated today. They like the alternatives and they work.

Technically, AT&T's just as competent as the others. They certainly have good marketing muscle.

AT&T's entry will have an effect on the market, but the price is not aggressive. Some providers are already at $15 a month.

Lisa Miller

President, Kompleat Internet Services, Frederick

It's a very positive step for the Internet. We're going to see more competitive prices.

We welcome the competition. There are reasons to stay with smaller Internet service providers -- personal attention is one.

AT&T is not going to come in here and hold the small businesses' hands and help them prepare for growth. We are not looking to become a provider for the entire country. We are going to direct our attention to what Maryland needs.

MCI has had direct-dial access to the Internet out since last year and they haven't put me out of business. Bill Gates did the same thing with Microsoft Network. That was supposed to be The Big One. I have to smile.